The Periodic Labour Force Survey (PLFS)

The Periodic Labour Force Survey (PLFS)

Context:

• The Periodic Labour Force Survey (PLFS) has undergone a major revamp, shifting to monthly estimates, expanding rural coverage, and enlarging sample sizes.
• The Paradox: While headline indicators (unemployment rate) look stable and “healthy,” a deeper look at the 2025 Annual Report reveals a sobering reality of stagnant wages and poor job quality.
• The Core Issue: In India, low unemployment often reflects a compulsion to work (survival) rather than the availability of high-quality, productive jobs.

KEY LABOUR INDICATORS (2025 VS. 2022)

The 2025 Annual Report shows an increase in participation, but the composition of that participation remains a concern.

Definitions to Remember:

1. LFPR: The percentage of the population that is either working or actively looking for work.
2. WPR: The percentage of the total population that is actually employed.
3. Usual Status: A long-term measure of employment (reference period of 365 days).

THE STRUCTURAL CHALLENGES

1. The Dominance of Self-Employment

Over 56% of India’s workforce is self-employed. This category often includes “disguised unemployment” where people work in low-productivity family businesses or farming because they have no other choice. Regular salaried jobs have increased only marginally.

2. The Gender Divide

While female LFPR has improved to 40%, the gap with men (80%) remains massive.

• Urban Crisis: Barely 1 in 4 women is in the urban labour force.
• Rural Distress: Higher female participation in rural areas is often a sign of economic “distress” (working to supplement falling household income) rather than “empowerment.”

3. Stagnant Real Wages

The most critical finding of the 2025 report is the divergence between jobs and earnings.

• Nominal vs. Real: While salaries are higher in “name” (nominal), once adjusted for inflation (Real Terms), the growth is weak or stagnant.
• Casual Labour: This group (20% of the workforce) remains the most vulnerable, with limited gains in daily wages.

WHY “LOW UNEMPLOYMENT” IS MISLEADING

In developed economies, unemployment is a measure of people who can afford to wait for a job. In India:

• No Safety Net: Most people cannot afford to stay unemployed. They take up any available work (casual or self-employed) to survive.
• Productivity Gap: A person might be “employed” but earning very little in a low-productivity role.
• The Shift Needed: The focus must move from just “creating jobs” to “creating productive jobs” that offer stable, living wages.